Independent mortgage bankers are making a lot less money on each loan they originate these days, and they're originating a lot fewer loans on top of that.
The Mortgage Bankers Associationreleased a rather depressing report, showing production profits fell to $606 per loan in Q1 of this year from $890 per loan in Q4 of last year and $1,088 in Q1 of 2009 - a 40 percent drop!
The problem is that production volume is falling as costs are rising.
There was a drop in, "the average production volume for each firm to $157.8 million in the first quarter of 2010, compared to $216.5 million in the fourth quarter of 2009. In addition, production operating expenses rose to $5,147 per loan in the first quarter 2010 compared to $4,402 per loan in the fourth quarter of 2009."